Getting another $n * 0.93

One of the main goals when selling software is getting people to be aware of your product so they will buy it. Ideally, everybody will buy it at full price (let's call this $n) but not everybody is going to be finding your application through word of mouth, search queries, links from websites that mention it, and so forth.

There are something like 25 million Mac users out there, probably more, who could conceivably buy your application. But the fact is, a good 99.9% of them have never heard of your application and won't buy it.

So even though it would be cool to get just a few more users at $n per license, it might be worth reaching some small percentage of that 25 million people who weren't going to be paying you anything otherwise. This is why it's often useful to do discounts and sales (getting you an additional 50-90% of what you make on normal-priced sales), daily promos (an additional 20%-30%), or perhaps bundles (peanuts per license, but hopefully a few extra thousand dollars) to reach some of those otherwise unreachable people and make them paid users of your application.

So when Bodega announced recently that they were going to be expecting a commission of 7% for each sale that they made through their store, there was a flurry of negative reaction in the Twitterverse. Several people said that they were going to be de-listing their applications from Bodega.

That's a really unfortunate reaction. My reaction, on the other hand, was of joy and excitement. The thought of having the Bodega team working to get new customers for only a 7% commission — 0.93 of each dollar of the prices of the software going to Karelia — seems like a great deal to me.

Perhaps these people think that everybody that was normally finding their Application via more traditional means would now be using Bodega, and cut them out of 7% of what they were going to be getting. Poppycock! Sure, maybe a few people might flip a coin to decide whether to search for a solution to a problem using Bodega instead of Google, or go browsing Bodega instead of MacUpdate, but my thinking is that (if Bodega can actually get some good marketing going for this), Bodega will be bringing you new people that would not have ever found and bought your application.

Here's the formula:

$n * .93 > $n * 0.

So I welcome the opportunity for more customers to find our software, and indie software in general. I'm happy to pay a commission for this, and I'll be looking for other opportunities to allow somebody else to market our software for a cut. Heck, in many circles of software and information-based products, companies pay a referral commission of 50% to those who get them new customers, sometimes even higher rates like 75% (or even 100% if their short-range goal is building up a list of customers to sell more stuff to later).

I wish Bodega luck in their new launch, and hope that they are able to do some good marketing and reach Mac users that have not yet found out about the many wonderful software products there are out here in indie-land.